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[H.A.S.C. No. 108–23]



FOR FISCAL YEAR 2005—H.R. 4200






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MARCH 11, 2004





JOEL HEFLEY, Colorado, Chairman
HOWARD P. ''BUCK'' McKEON, California
WALTER B. JONES, North Carolina
JIM RYUN, Kansas
ROBIN HAYES, North Carolina
KEN CALVERT, California
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TOM COLE, Oklahoma
JOHN M. McHUGH, New York

LANE EVANS, Illinois
GENE TAYLOR, Mississippi
VIC SNYDER, Arkansas
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California
RICK LARSEN, Washington

Mary Ellen Fraser, Professional Staff Member
B. Ryan Vaart, Professional Staff Member
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Diane W. Bowman, Staff Assistant
Danleigh S. Halfast, Staff Assistant





    Thursday, March 11, 2004, Fiscal Year 2005 National Defense Authorization Act—Adequacy of the Fiscal Year 2005 Budget to Meet Readiness Needs

    Thursday, March 11, 2004




    Hefley, Hon. Joel, a Representative from Colorado, Chairman, Readiness Subcommittee
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    Ortiz, Hon. Solomon P., a Representative from Texas, Ranking Member, Readiness Subcommittee


    Casey, Gen. George W., Jr., Vice Chief of Staff, Army, Department of the Army

    Huly, Lt. Gen. Jan C., Deputy Commandant for Plans, Policy and Operations, United States Marine Corps

    Moseley, Gen. T. Michael, Vice Chief of Staff, Air Force, Department of the Air Force

    Mullen, Adm. Michael G., Vice Chief of Naval Operations, Department of the Navy


[The Prepared Statements can be viewed in the hard copy.]

Casey, Gen. George W., Jr.

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Huly, Lt. Gen. Jan C.

Moseley, Gen. T. Michael

Mullen, Adm. Michael G.

[The Documents can be viewed in the hard copy.]

[The Questions and Answers can be viewed in the hard copy.]

Mr. Hefley

Mr. Snyder


House of Representatives,
Readiness Subcommittee,
Committee on Armed Services,
Washington, DC, Thursday, March 11, 2004.

    The subcommittee met, pursuant to call, at 9:01 a.m., in room 2118, Rayburn House Office Building, Hon. Joel Hefley (chairman of the subcommittee) presiding.
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    Mr. HEFLEY. Good morning. I want to say good morning to all of you. We particularly want to welcome the wives who are back there. I will tell you how nice it is for these gentlemen to have adult supervision with them this morning. [Laughter.]

    We anticipate much better performance from them than we usually get, so we are glad to have that.

    This morning the Readiness Subcommittee will hear testimony from military services on the readiness of their troops and the adequacy of the proposed fiscal year 2005 budget to support readiness.

    I am pleased to learn that the reported unit readiness of our troops remains high. This would not be possible without the continued dedication and commitment of each of our soldiers, sailors, airmen and Marines. I hope to hear from the witnesses as to what will be necessary to maintain these readiness levels and to learn where we can expect readiness levels to decline as troops return from deployment.

    I am concerned with reports of funding shortfalls in fiscal year 2004. There have been unforeseen circumstances and expenses this year, and that is to be expected as we are fighting a war. I expect the witnesses to testify today to what extent these circumstances are impacting readiness accounts, and to what extent reprogramming and movement of funds will be necessary to continue funding the cost of war. There are also discussions on when supplemental funding for fiscal year 2005 should be provided. Presuming supplemental funding will arrive after the first quarter of fiscal year 2005, I hope the witnesses can provide greater clarity into the services's plans to operate until supplemental funding is provided.
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    Finally, it would be helpful for each witness to discuss programs or actions that are being taken to increase or maintain readiness levels, while also continuing operating expenses.

    Before we get to the witnesses, I would like to give an opportunity for my friend Solomon Ortiz, the Ranking Member of the subcommittee, for any comments he would like to make.


    Mr. ORTIZ. Thank you, Mr. Chairman.

    I would like to echo what you just mentioned about the lovely wives being here. They go through a lot of sacrifices, especially when their spouses go into harm's way, and they stay behind with the children and leaking roofs, and plumbing that doesn't work; and this is why we hope we can take care of some of those problems. Welcome to this committee.

    Mr. Chairman, I join you in welcoming our guests today. We are very fortunate to have such a distinguished panel this morning. First, I want to say how proud I am of our military forces. They continue to rise to each challenge that we put before them. We are thankful that so many stand bravely in harm's way for us. Beyond those who are deployed, we should not forget the thousands of service members and civilian personnel who work to support them. They do all that is asked of them and more. We owe our servicemen and servicewomen a debt of gratitude for their outstanding service.
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    Mr. Chairman, there is no doubt that we continue to live in an era that places increased demands on the readiness of the total force. When I use the term ''total force,'' I am speaking about the active duty, National Guard and Reserve service members and civilian workers who contribute so much to force readiness. They have all been operating at a demanding tempo, and there is no indication that it will slow significantly anytime in the near future. We owe it to them to provide them with the funding, equipment, programs and training that they need in order to defend our great nation.

    I am pleased that the budget request reflects some increases in the O&M accounts. But, as I have mentioned over the last several years, I remain concerned that increases in readiness funds have not kept pace with the demanding tempo that stresses our forces. In this last year, the continuing war in Iraq and the war on terror in general have placed unforeseen strain on our forces. The services have been forced to raid other accounts to meet operational and other readiness requirements.

    I am deeply concerned that in fiscal year 2005, the war-related funds are not funded in this budget either. This means that the services run considerable risk as they pay for those costs up front, while waiting for supplemental funding. That supplemental funding may or may not arrive in either the time and the amount needed. It is no surprise, therefore, to see services report a significant unmet readiness, at least in their unfunded priority list.

    For example, the Marine Corps, the numbers of their unfunded priorities are $43 million for depot level maintenance. The Army's unfunded priorities include $1.2 billion for depot maintenance and other vital force protection requirements. I would appreciate it if our witnesses would discuss some of the specifics of these service readiness-related shortfalls and how they intend to address them.
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    As units return from the difficult duty in Iraq, Afghanistan, and many other places in which we are engaged in this war on terror, they must repair worn and battle-damaged equipment. Much of this activity should take place at our depots. Spare parts must be restocked, and pre-positioned equipment reconstituted to support future contingencies. I am concerned that this budget does not fully fund those activities to the extent necessary.

    Additionally, the Department of Defense is in the process of converting military jobs to civilian positions, but this must be managed correctly. In the absence of a clear process for making this happen, I am concerned that we might interrupt the flow of essential readiness-related goods and services. If we are not careful, we will also place unexpected burdens on our civilian workforce. Certainly, they will rise to the occasion, but we owe it to all of our people, both in uniform and civilians, to make sure this transition happens as smoothly as possible. I look forward to hearing our witnesses, their thoughts on what method they are going to use to identify positions ripe for migration from military to civilian staffing, and how they plan to implement the conversion.

    Mr. Chairman, I look forward to this hearing today. There is so much to be learned about what is going on in the world and specifically on the role that you play, and I am very happy that you are with us today.

    I thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you, Mr. Ortiz.

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    Let me introduce the witnesses and ask that they present their opening statements, and all of your submitted written statements will be part of the record, without objection. Hearing no objection, so ordered.

    First, we have General George Casey, Vice Chief of Staff of the Army; Admiral Michael Mullen, Vice Chief of Naval Operations; General T. Michael Moseley, Vice Chief of Staff of the Air Force; and Lieutenant General Jan Huly, Deputy Commandant for Plans, Policy and Operations for the Marine Corps.

    Let me say, and I don't think I need to say this, you all wear different uniforms, but you are on the same team. We wear a different uniform from you, but we are on your team, too. So we do not look at these hearings as adversarial proceedings, although we have an oversight role, but we look at them as opportunities for us to have candid and open discussions because we cannot do our part on the team unless we know the game plan. You are in the best position to give us the game plan.

    So we need to know. All of us feel the same way about the troops, and you hear this over and over from us; and we hear it from you that the troops are doing a great job. But by golly, we do not want to send any of those troops out there to do that job if they are not properly trained and properly equipped. If we have shorted them on those kinds of things, then we are not doing our job. We are not playing our role on the team. You can tell us what it is you need, and we can do the best we can to see that you get what is needed for the defense of the country.

    So General Casey, with that I will throw it open to you.
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    General CASEY. Thank you, Mr. Chairman. Chairman Ortiz, members of the committee, I appreciate the opportunity to appear before you today to discuss the Army's readiness and our plans to meet current worldwide commitments while we simultaneously transform to a more agile, versatile, joint and expeditionary force.

    I thank the members of the committee for their continued support to the men and women in uniform, and our great civilians that make up our great Army. With over 320,000 soldiers deployed in 120 countries worldwide, the Army remains actively engaged in support of this nation's operational requirements. The vast majority of these troops are engaged in combat operations in the United States Central Command area of operation, and currently the equivalent of eight Army divisions is either deploying to or redeploying from overseas missions. This constitutes the largest deployment of U.S. forces since World War II.

    Couple that with the mobilization of 150,000 combat-ready National Guard and Reserve soldiers, and you can see that this is an unprecedented moment in the Army's history. Today it is clearly not business as usual in your Army. Our commitments have highlighted stressers on our forces and the Army has embarked on a series of initiatives to reduce these stressers, to improve our capabilities, and to transform to a more joint and expeditionary force in this decade.

    First, we are rebalancing some capabilities between the active and Reserve component forces to improve our strategic agility. We will reallocate about 100,000 positions to relieve the burden on the so-called low-density/high-demand forces such as military police.
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    Second, we are reorganizing our combat formations into modular brigade-based formations to make them more self-sufficient and to facilitate force packaging. We intend to increase the number of active component brigades from 33 to 43 by fiscal year 2007 and to convert our 34 National Guard brigades to the modular formations. This process has already begun with the Third Infantry Division in Fort Stewart, Georgia.

    To do this, to increase these numbers of brigades, the President and the Secretary of Defense have approved our request to grow temporarily the Army by 30,000 positions above its statutory end-strength. We think this is the right plan and we ask for your support on this.

    Third, we are initiating our force stabilization program to increase unit readiness, reduce personnel turbulence and make life more predictable for our soldiers, units and families. Under this program, units will form, train and stay together for roughly 36 months, enhancing unit cohesion and effectiveness. Soldiers will be assigned installations for six to seven years, instead of the normal three as we do today. We think this will improve predictability and allow them to grow roots in the community. Together, these efforts will yield an Army that has the right capabilities to respond rapidly and decisively to the challenges we will face in the future. While moving forward on these initiatives, we will also address areas of continuing interest and concern affecting our people and our infrastructure. This includes, first, providing our forces with the right equipment for the missions of the global war on terrorism; second, reconstituting our equipment returning from Operations IRAQI FREEDOM (OIF) and ENDURING FREEDOM (OEF) through a rigorous long-range program we call Setting the Force; third, ensuring that our modernization efforts continue to bear fruit, as in the recent fielding and deployment to Iraq of our First Stryker Brigade and also our continued commitment to the future combat systems; fourth, providing our uniformed and civilian members the quality of life that is the equivalent of the society which they defend; and fifth, improving the quality of our installations.
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    Our commitment to current and future readiness is steadfast, even when this entails making difficult choices such as canceling the Comanche aircraft program. I will be happy to take more detailed questions about that later, but we would ask your support to continue to use the Comanche resources to fix Army aviation. The fiscal year 2005 budget will enable the Army to provide our combatant commanders with the requisite land power capabilities for the global war on terrorism, homeland defense and other worldwide commitments. It covers our baseline operations, the 15 critical systems in our recapitalization program, and our transformation program. It does not address the ongoing operations in Iraq and Afghanistan, or the recovery from those operations.

    Your support of this budget and the war-related costs for our ongoing operations is critical if our units are to continue their remarkable performance and to be ready for future contingencies. We appreciate your support and your dedication to the sons and daughters of America, and we thank you very much for your support.

    I look forward to taking your questions.

    [The prepared statement of General Casey can be viewed in the hard copy.]

    Mr. HEFLEY. Thank you, General Casey.

    Admiral Mullen.

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    Admiral MULLEN. Mr. Chairman, good morning. Congressman Ortiz, other distinguished members of the subcommittee, I too greatly appreciate this opportunity to appear before you, along with my joint partners to discuss one of the most important topics to our military and the security of the nation, the state of current and future readiness of your Navy.

    I would first like to report that the fiscal year 2004 supplemental funding that you provided last year has gone precisely where we said it was needed most. I am very grateful for that. Most shortfalls we had are being filled and the readiness gaps are, in large part, solved. The Navy could, in the very near future, rapidly surge up to six carrier strike groups within 30 days, and two more soon thereafter, what we call six-plus-two, as well as similar quantities of amphibious force shifts, providing options and significant combat capability for the President, just like that provided at the height of Operation IRAQI FREEDOM just one year ago.

    This is the return on your readiness investment in the Navy. The Navy had some unplanned expenditures tied to the current movement of forces into Iraq in OIF II. I expect DOD to cover as much of these costs as possible from resources managed centrally by the comptroller in DOD, such as the Iraqi Freedom Fund. While we continue to be forward deployed in support of OIF and OEF, our new employment initiatives have provided a more flexible, sustainable rotational force. That newly-organized force is still forward deployed, but now it is coupled with a significant surge-able combat-ready element in home waters.

    My written testimony goes into some detail about our Fleet Response Plan, but the bottom line is that we have stabilized the force, and our new employment construct will allow us to repeat what we did a year ago later this year. We are producing the best readiness levels I have seen in my career.
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    We have also instituted other organizational changes to increase our current readiness and accelerate our advantages. Validating a new force-packaging concept, the Expeditionary Strike Group (ESG) I, returned from its initial deployment two days ago. ESGs combine Navy deep strike and Marine forcible entry capabilities and are a sign of the future. Portending new concepts of operations for ship-to-objective deep strike inland and the potential for significant near-covert operations executed from sea bases offshore, ESGs provide new, powerful and flexible options.

    The Commander, Navy Installations, was established this year to centrally manage all shore installations, promote best practices development enterprise-wide, and increase efficiencies, saving approximately $1.2 billion across the Five-Year Defense Plan (FYDP). For recapitalization and future readiness, we are executing initiatives totaling approximately $40 billion and have identified $12.4 billion in cost savings and requirements mitigation over the next five years to further our Sea Power 21 vision. Multi-year procurement contracts and economic order quantity purchases are already generating savings. I would point to the F–18E and F multi-year procurement contract which is expected to save us in excess of $1 billion in the FYDP.

    This past year also validates the strategic value of Sea Basing. During the opening hours of OIF, Sea Basing enabled a three-axis attack on Iraq. More recently, the Navy's Military Sealift Command, often the command that does not get the visible press, has moved over 9.8 million square feet of joint force cargo over the last six months in support of the largest force rotation since World War II. We will continue to budget the resources to make this a true national capability. Our vision is to support as much of the joint fighting force as required, when facing an anti-access environment, or host nation support is unavailable or overly restrictive, as has been the case recently.
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    Admiral Clark and I are confident that the Navy's fiscal year 2005 budget submission will provide the right readiness at the right cost for the right forces, as we continue to fight the global war on terrorism. Units are now maintaining extended periods of combat readiness to meet our Nation's needs, known and unknown, including those units who have just returned from deployments.

    We have, however, taken some well-considered risk in this budget proposal as we balanced our efforts between current readiness, future readiness and the overall health of the Navy. There is no fat in the readiness accounts. I would like to draw your attention to some potential challenges. There is little to no excess capacity in the ship repair industrial base. It is at full capacity and working overtime in most cases. Our fiscal year 2004 planned maintenance requirements modestly exceeded our full capacity, causing us again to defer some work into fiscal year 2005.

    There is some risk associated with this lack of excess capacity and the ship industrial base must be very carefully managed if we are to sustain our ability to surge. We are doing that. The Fleet Response Plan to which I referred to earlier, and our continuous maintenance philosophy are mitigating some of this risk. We are not yet in the clear on the EA–6B Prowlers, the subject of critical concern last fall, which you funded. Wing center sections, outer wing panels, J–52 engines, all require attention to maintain a flyable inventory for the joint combatant commanders.

    We are, with your support, meeting requirements and on track to have over 80 aircraft operational this summer, with a return to normal force levels just about a year later of this critical joint asset. P–3 aircraft on operational deployments are flying hard, expending their fatigue life at a higher than planned rate. In order to sustain the P–3 fleet until its replacement, what we call the MMA, multi-mission aircraft, is at its initial operational capability in about the 2012 time frame. We are working to provide the right number of aircraft to combatant commanders and managing the flying hours of non-deployed aircraft.
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    Through these efforts, we are balancing current readiness with an eye to future requirements. Within our current plan, we can meet the needs of both. New requirements for P–3s, however, would lead us to tough choices between the two. Stockpiles of precision-guided munitions are slightly below current requirements. The Navy has, however, programmed and funded PGM production; and we will see our stocks replenished by the end of this budget period.

    Finally, I believe that encroachment on our training areas will not abate. Encroachment directly impacts current and certainly future readiness and the risk rises each time our forces enter combat with less than realistic training. I would ask for your continued leadership and support in resolving this challenge for the long-term health of the military services.

    On the whole, you should be confident that we have provided the best budget possible based on what we know today. Readiness at any cost is also not acceptable. We have striven to reasonably spend the taxpayer's dollars to provide for a ready Navy. We believe that our readiness accounts are properly balanced and, outside of unforeseen changes in our obligations, on solid financial footing.

    Mr. Chairman and distinguished members of this committee, in closing I would again like to express my great appreciation for your enduring and exceptional support. The Navy was, is and always will be a rotationally deployed force, providing joint combatant commanders with persistent combat and credible Navy power. The Navy is now providing a significant surge capability as well, thanks in great part to your readiness support. The nation's investment in the United States Navy is providing solid returns in the form of combat-ready forces. These dollars are well spent.
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    I thank you for your time here today and look forward to taking your questions.

    [The prepared statement of Admiral Mullen can be viewed in the hard copy.]

    Mr. HEFLEY. Thank you, Admiral Mullen.

    General Moseley.


    General MOSELEY. Chairman Hefley, Congressman Ortiz, distinguished committee members, thank you for this opportunity to appear this morning to present this year's state of readiness alongside my joint brothers. It is my privilege to report on our key programs; and on behalf of airmen stationed around the globe, I want to thank this committee for your continued focus on readiness and the challenges facing our airmen today.

    The success of the Air Force around the world has been a testament to the dedication and professionalism of our people and your continued help. Last year, we asked for your help to increase funding for spare parts, depot maintenance and munitions programs. Trying to reconstitute our capabilities following Operation IRAQI FREEDOM, we needed increases to our flying hour training and general O&M funding. In both cases, this committee ensured America's sons and daughters had the resources they needed to accomplish the mission for the combatant commanders.
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    Today, the Global War on Terrorism imposes on our airmen the requirement to be ready for tomorrow's challenges, while adapting to the new steady state of operations in Operations NOBLE EAGLE (ONE), ENDURING FREEDOM and IRAQI FREEDOM. Every day, the total force team comprised of Air National Guard, Air Force Reserve airmen and active duty airmen have more than 50 aircraft dedicated to ONE at any one time. Halfway around the world, the Air Force maintains 24,000 airmen with over 200 aircraft to fly 250 sorties a day. Airmen in Iraq and Afghanistan will continue to defeat threats, aid stability operations and supply transport to the joint team.

    Obviously, their Herculean efforts have paid off. However, they come at a cost. To defend America's skies, ONE operations cost approximately $150 million per month. Abroad, operations in Afghanistan cost the Air Force roughly $200 million per month. Twelve years of continuing patrolling the no-fly zones in Northern and Southern Iraq have cost us roughly $67 million per month for that period of 12 years.

    Besides the direct costs, there are also the second order costs as we move to re-set and reconstitute the force during combat operations. One such cost is the delay in re-setting the air expeditionary force. Last fall, I testified that we planned to return to pre-OIF rotational cycles by March of 2004. Unfortunately, we have only been able to return 90 percent of our force to that sustainable battle rhythm. With approximately one-third of our combat forces deployed, we now project that OEF, including its low-density and high-demand assets, will not be fully re-set until March of 2005, and that will get at that extra 10 percent.

    Another cost is in reconstituting our capabilities. This year, we estimate our total cost to replenish all war reserve materiel (WRM) requirements at $1.96 billion. From vehicles and base expeditionary airfield resources to field equipment and munitions, this level of funding will allow most of our capability to be reconstituted within the next 24 months.
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    Along with reconstituting, we must maintain overall readiness. Our 2005 readiness request ensures that we maintain ready to perform our wide-ranging global missions. Within that request is a fully-funded flying hour program that pays for considerable spare parts and fuel to sustain our required combat readiness; 1.7 million flying hours to maintain readiness and support joint ops, and a worldwide mobility operation to ensure joint and coalition forces have what they need when they need it.

    This request comes at a time when our airmen are doing amazing things to maintain Air Force readiness, especially in combat. In fact, thanks to their hard work and proper funding, fleet consolidations and transformation initiatives, we hit many readiness milestones last year which are detailed in my written testimony. One of the biggest measures of merit was the fact that 14 of 20 major weapons systems saw improved in-commission rates at a time when we were flying more hours. A portion of those successes can be attributed to our Warrior class depots; but this, too, comes at a cost. The Air Force continues to invest in making depots more efficient to increase the total number of aircraft available to the war fighter.

    For 2005, we have increased depot purchased equipment maintenance funding to $3.7 billion, but our depots can only do so much. Although in-commission rates were up during OIF, aging aircraft issues continue to present us with the problem of fewer assets being available at ever-increasing cost. We must begin to modernize our fleet. Today, our average fleet has approximately 23 years of service. Some like our Eisenhower-era KC–135s average as much as 43 years in service, with the oldest aircraft still flying being a KC–135 that was delivered on 28 October 1957. Mr. Chairman, these and our other aging aircraft are vulnerable to a myriad of problems including technical surprises, vanishing vendors, and increased operational costs. In addition to platforms, we must address our support systems and growing infrastructure deficiencies such as deteriorated airfields, hangars, water lines and electrical networks. Our investment strategy across this entire spectrum is more than $4.8 billion in 2005. As the air component commander for the last two U.S. military conflicts, it was ever clear to me that the strength of our forces resides in the power, integrity and readiness of our people. The 700,000 men and women of our total force, active duty, Guard, Reserve and our civilians, are the best America has to offer. There is no better investment than our people. They are our number one weapons system.
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    Mr. Chairman, we are sustaining our personal readiness rates in face of higher optempo, skill shortages and reduced training opportunities. To maintain readiness, we must continue to focus on recruiting, training, force shaping, retention and our total force. Our number one challenge is adapting to the new steady state. While we believe we have the right number of airmen, the mix of skill sets, the ratio of military, civilian and contractors needs to be adjusted. We are in the process of shifting manpower, realizing personnel, hiring additional civilians and contractors, and investing in technology to free military members to focus on military duties.

    Sir, in closing, the greatest testament to Air Force readiness is our continued success in projecting power around the globe and protecting America and her allies from potential enemies. Clearly, our airmen, as part of the most combat-effective joint team, have excelled. When called, we are ready, ready to strike or project power, or to support the joint team anywhere on the earth. Lethal and responsive, America's airmen are ready to act whenever and wherever they are called.

    Mr. Chairman, Congressman Ortiz, thank you again for your support and I welcome the opportunity to answer any questions you have.

    [The prepared statement of General Moseley can be viewed in the hard copy.]

    Mr. HEFLEY. Thank you, General Moseley.

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    General Huly.


    General HULY. Chairman Hefley, Congressman Ortiz, distinguished members of the committee, I am really proud and honored to be here representing the 215,000 active duty and Reserve Marines serving in our corps today. Thank you for allowing me to present my statement.

    The message I bring you is that your Marine Corps is set and ready to continue our role in protecting the security and interests of our nation with forward-deployed expeditionary naval forces. Currently, we are in the process of deploying 25,000 combat-ready Marines and sailors to Iraq and supporting contingency operations in Haiti, Afghanistan and the Horn of Africa.

    Today, we have over 55,000 Marines forward deployed in stations worldwide. Our Reserve units and individuals are combat-ready and have rapidly integrated with the active force, demonstrating the effectiveness of your Marine Corps total force. Through careful maintenance management, our material readiness has shown steady improvement. Owing to our commitment to quality of life, recruiting and retention programs, our personnel readiness remains high. Our training remains challenging and focused to the tasks at hand. Other than sustaining our current operations, our single greatest concern now and as we look beyond Operation IRAQI FREEDOM II, is maintaining the readiness of the force. In closing, let me say that you have every reason to be proud of the contributions and sacrifices of the women and men of your Marine Corps and the families that support them, and to be confident in their continued success.
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    Sir, your reference earlier to the different uniforms that we wear reminds me in the summer when I watch the all-star team take the field, it presents pretty much an unbeatable team. I would like to think that when we as the services take the field in our different uniforms, we too, be it in either training or combat, represent an all-star winning team that no one can beat.

    Thank you for the opportunity to present and represent the United States Marine Corps on that all-star team today.

    [The prepared statement of General Huly can be viewed in the hard copy.]

    Mr. HEFLEY. General Huly, I think that your last statement is very, very true. It has not always been that way. There used to be a lot more competition between the services, and everybody had to have their own thing. I am very encouraged by the direction we are moving here.

    General Casey, one statement you made I think hit home with me and Congressman Ortiz and Congressman Snyder, who have been involved a long time in the MILCON business, when you said that your goal is to provide a quality of life commensurate with the society that they defend. That has not always been that way, either. But we asked people who wear our uniform to make a lot of sacrifices that we cannot help. It is just kind of the nature of the business, but things we can help, we ought to be busy helping. They should not make unnecessary sacrifices. We should provide a decent quality of life for people who dedicate themselves to defending their country.
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    General CASEY. Mr. Chairman, could I just comment on the Residential Communities (RCI) Initiative we have to improve the quality of housing? I think you might have visited some of those places out at Fort Carson.

    Mr. HEFLEY. Oh, yes.

    General CASEY. For about a $200 million investment, we are getting private capital investment to the tune of about $3.6 billion. We are able to renovate about 70 percent of all Army family housing. That is a really, really significant increase there, and we are very, very happy with that.

    Mr. HEFLEY. I know that the soldiers at Carson and everywhere I go, soldiers, sailors, airmen, wherever it is being done, seem to be really pleased with it. In fact when we cut the ribbon out at Fort Carson on some of those new houses, some of these soldiers's wives just could not believe they were moving into Army housing. That is what we want to do.

    Congressman Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    Your statement, General Casey, we are working on two divisions for the Army and a division for the Marines, but you mentioned something about bringing them temporarily. Maybe you can expand a little bit on what ''temporarily'' really means when we talk about those 30,000 soldiers.
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    General CASEY. Thank you very much, Congressman Ortiz. As I mentioned, there are stressers on the force right now, and we know we need to generate additional combat power. We believe that combat power that we need is best generated in the form of modular brigades, not divisions. Modular brigades are the design of the future combat systems. So we believe that we ought to use the opportunity of the re-set of the forces coming back from Iraq and Afghanistan and use the fact that they are already in a situation where they need significant work to bring them back up to speed. We need to take advantage of this opportunity and re-set them how we want them to be for the future. That is the first point.

    The second point is, we know that we have structure within the Army, Cold War structure that we no longer need right now, artillery, air defense, armor, the logistics units that support those types of organizations. We cannot get that force structure taken down fast enough to give us the headroom we need to build the brigades now when we need them. We want to build these brigades and use them to put into the rotation for Iraq to lessen the burden on the rest of the force.

    So we have a situation where we need the combat power now, but we cannot get the other force structure out fast enough. So we have asked to exceed our end-strength to 2007 while we look for these efficiencies, but build the brigades, take the efficiencies out so somewhere after 2007 we will settle down into an end-strength of about where we are today and have a more capable force for the future. That is the essence of this.

    Mr. ORTIZ. But still we are talking about 30,000 individuals, 30,000 soldiers.
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    General CASEY. Up to 30,000.

    Mr. ORTIZ. Do you think you can get them through your regular recruitment to come up with the 30,000?

    General CASEY. It will be a combination of recruitment and retention, and we will gradually ramp up our recruitment and increase our retention ramps here, but a combination of that will build up to 30,000 and then take out spaces and bring ourselves back down to about 48,000 which is where we are now.

    Mr. ORTIZ. Of course, you will have to wait for the funding to come, but how soon can you implement?

    General CASEY. We believe that we will be able to pay for the majority of this out of the war-related funding in 2005. We have about a $2.4 billion bill in 2005. We are started on this now, with the Third Infantry Division in Fort Stewart, Georgia, and we will begin two more infantry brigades later this year; one in the 10th Mountain Division and one in the 101st Airborne Division.

    Mr. ORTIZ. This is a question for everybody. We talk about that unfunded requirements list that is submitted. I think that this committee, and at least myself, I would rather see something put in the budget as to how much money we need, instead of depending on supplementals, because we never know whether those supplementals will come through; whether they will come in timely. I would like to see all these unfunded requirements put in a budget instead of doing supplementals. Maybe all of you can expand on that.
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    I know that some others worked with you on preparing this budget, but I would like to see, Mr. Chairman, a request on the budget so that not only are we in a better position to where we can help you, but the American people will be also more knowledgeable as to how we are spending this money, because we go from supplemental to supplemental, plus the Presidential budget, plus what we include. That is what I would like to see.

    General CASEY. We have a plan that we have laid out over the next five years in very good detail. We have shared it with some of the staff already and I believe some of the members. We are more than happy to come over and lay that out for everyone. I would be happy to do that for you,

    Mr. ORTIZ. Thank you. Would anybody like to touch on that?

    Admiral MULLEN. Yes, sir. I will take a crack at it. From the Navy's perspective, and this is also part of our history, we have typically funded significant amounts of operational time in our budget on a routine basis. We are able to because we are rotational and because we are out and about, as Admiral Clark likes to say, in lots of places, we are able to respond to a certain degree with the funds that are regularly provided.

    That said, when we have a big surge like we did a year ago that was not planned for, clearly we are as dependent as anybody else on supplemental funds to make that. What is very challenging is estimating what those are going to be in terms of providing for the unknown out there. Having spent the last couple of years in the budget world and dealing with all the supplementals and the main budgets, that challenge of estimation, it really is a significant one.
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    One of the questions, I think, Mr. Chairman you asked in your opening comments was, in 2005, when would we need it? Clearly, just given the normal cycle and timing around here, we probably need a 2005 supplemental in about the springtime frame just in order to be able to execute it some time in 2005. But predicting what that would be for the Navy right now would be very, very difficult.

    I have some challenges I indicated that were unexpected with the Marine Corps movement right now to the tune of about $700 million. Those are the challenges I am working with OSD right now to try to resource out of the funds that have already been provided in the supplemental. We are working our way through that.

    Mr. ORTIZ. Anybody else?

    General MOSELEY. Yes, Mr. Ortiz, let me piggyback on my colleagues.

    The predictive ability looking ahead for us is limited. We can tell you what we are spending, what are spend rates are right now, and that is about $815 million per month with the global war on terrorism, the breakouts for Iraq, for Afghanistan and for Operation NOBLE EAGLE. That is $465 million for Iraq, $200 million for Afghanistan and $150 million for Operation NOBLE EAGLE. We can tell you, as I have in my opening remarks, that we have spent about $67 million per month for 12 years doing Operation SOUTHERN WATCH and NORTHERN WATCH, for a tune of about $12 billion over the 12 years that we were deployed for that.

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    About the most stable prediction that we have for 2005 is our Operation NOBLE EAGLE funding which has been stabilized. But sir, beyond that I am not sure we could give you a good number projecting the challenges in Afghanistan and Iraq, which takes us back to the dilemma of being able to program an unknown set of unknowns.

    Mr. ORTIZ. Thank you, General.

    General Huly.

    General HULY. Sir, just two quick anecdotal observations. Last October, the Marine Corps had no idea that it would be participating in Operation IRAQI FREEDOM. Today, I have 25,000 Marines and sailors forward deployed to that arena that we were not expecting. Two-and-a-half weeks ago, we were not expecting to have 1,500-plus Marines in Haiti conducting operations today. With uncertainties like that, it is just very difficult for us to predict what our future expenditures are going to be.

    Mr. ORTIZ. Thank you very much. I think that we are going to be involved in these different areas for a long time to come, especially Iraq and Afghanistan. I thank you so much and Mr. Chairman, my time is up. Thank you so much.

    Mr. HEFLEY. Mr. Forbes.

    Mr. FORBES. Thank you, Mr. Chairman.

    Gentlemen, first of all let me not miss the opportunity to thank you all for the jobs you are doing on behalf of all my constituents in southeastern Virginia. They always tell me when I see them how proud they are of our military men and women in uniform, and I just thank you for that job.
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    General Casey, I appreciate your comments on housing, especially from the troops that I have talked to at Fort Lee who are just excited about the direction that they see housing moving in there. I would like to ask you a question. Last week, one of our witnesses in response to a question I asked about Army logistics, praised the great work that the Army logistic troops are doing in Operation IRAQI FREEDOM. It is true that they are doing great things, but the Army Quartermaster Corps has been doing this exceptional work with less than the optimal number of troops. I was pleased to learn from the Army news release dated February 2 that the Army will begin, in fiscal year 2005, to convert many positions in less-utilized units to positions in quartermaster units. I was wondering if you could just elaborate on this conversion a little bit for us today.

    General CASEY. As I mentioned in my opening statement, Congressman, we have done some analysis, looked at low density/high demand specialties where we keep going to the well every time we need them and send them the same troops back. There are some of the quartermaster specialties that fall into that category.

    The second thing that we have done is we have looked at the first 30 days of a contingency. Using guidance that we received from the Secretary of Defense, we want to make sure that we do not have to rely significantly on the Reserve component forces to be able to do that. So we are transferring some of those logistical specialties, again some of which are quartermaster, so that we can get there, open the ports and airports quickly, and then receive the force and flow them into the fight. So those are the two major things that we are doing that would yield some savings or some additions to the quartermaster branch.

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    If I could make one more point, as we look at this, we really see the future of logistics at the theater level as joint-theater logistics. So we are working very closely. The logisticians of all our services are working very closely with the J–4 on looking at joint theater logistical architecture and logistical concepts for the joint force. We think that will be a major advance that will benefit all of the services.

    Mr. FORBES. General, in response to your comments about the Reserves, the Army did a fantastic job of deploying active, Guard and Reserve units for service in Operation IRAQI FREEDOM. I know the power support platforms, the power projection platforms, especially on the East Coast, that strategically deployed those units did an exceptional job. One question I would have is, do you feel that we are going to need to do anything in terms of modernization of any of those installations to continue that type of deployment activity in the future? If so, is that taken care of in the fiscal year 2005 budget at all?

    General CASEY. The short answer is yes, Congressman, we do. We believe that we have to significantly adapt our mobilization processes and also our infrastructure because what we are asking our Guard and Reserve components members to do is really fundamentally different than we thought we would be asking them to do during the Cold War. Instead of a mobilization system where you throw the switch and it all comes into gear and it just starts cranking out large formations to go off to fight Soviet hordes, we are now into a fairly sustained level of mobilization.

    So yes, we do need to improve our power projection platforms and facilities. To do that, we have some money in the 2005 budget toward that, but we have in our mind to try to gain some economies of scale by focusing on somewhere between nine and twelve centers across the United States, and then focus our resources on those particular centers; and we are not quite finished doing that yet.
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    Mr. FORBES. Thank you, Mr. Chairman.

    Mr. HEFLEY. Dr. Snyder.

    Dr. SNYDER. Thank you, Mr. Chairman.

    I wanted to ask General Moseley, in your written statement, it may be that I do not understand. Well it probably is; this is a statement and a question I am asking out of ignorance. You used the phrase ''mission capable rates'' and then a couple of pages later you talk about ''readiness rates.'' Are those different measures of the same thing, or do they refer to the same thing?

    General MOSELEY. The same thing, sir. ''In commission'' rates mean what we have in commission at any one time. ''Available rates,'' though, are different because those are the things that are not in depot status.

    Dr. SNYDER. On page 13, I wanted to ask, I do not understand this chart on page 13. Maybe you can help me with that. On the tankers, the readiness rate you consider to be 86 percent, so that is the same as saying the mission capable rate of 86 percent?

    General MOSELEY. Yes, sir. On any one time, on average, we have about one-third of the fleet that is not available for use. So we have about 86 percent of the fleet out there on any given day. In fact, I can give you today's rates; but we are talking, the MC rates or the percentage of the fleet that is capable of flying——
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    Dr. SNYDER. Is 86 percent.

    General MOSELEY. Yes, sir.

    Dr. SNYDER. You said one-third is not capable, but that is only about 15 percent, is it not?

    General MOSELEY. Yes, sir. But as we look at snapshots in time to give you the data that we have now, not the trend data over the last 10 years or so.

    Dr. SNYDER. So this was current readiness rates as of, so that was a snapshot on February 15?

    General MOSELEY. Yes, sir. If you would allow me, let me get you the exact timeline from our maintenance people and the exact date.

    Dr. SNYDER. Then I do not understand these arrows that are out at the side on that chart.

    General MOSELEY. Sir, those are the trend data. That is the trend data for that portion of the fleet over time, for intelligence, surveillance and reconnaissance (ISR), for special ops, command and control, et cetera.

    Dr. SNYDER. So for example, take fighters. It says 69 percent, down 7 percent, but then the arrow goes up.
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    General MOSELEY. As we work the depot problems and we have readiness and sustainment enhancement in budgeting, we were able to work that. We are trying to paint the picture of maintaining an aging fleet with what we have to keep them current and on line at any one time.

    Dr. SNYDER. All right. I think that the thing that struck me on that, what you are calling a snapshot, is there has been a lot of discussion by the Air Force in this town about tankers and what we are going to do about them. But the snapshot, the best performer there were your tankers.

    General MOSELEY. Yes, sir. With your help, we have put over $60 million into the depot at Oklahoma City and to the operations at San Antonio and at Birmingham to address that tanker problem with that fleet being 43 years old.

    Dr. SNYDER. I understand. I guess I am still confused by these numbers. Maybe I should not do it here, but when we talk about a current fiscal year 2004 bomber fleet rate that stands at 71.4 percent and the tanker fleet rate at 77.8 percent, so what is a current fiscal year 2004 rate? Is that an aggregate over one year? That is not a snapshot.

    General MOSELEY. That is an aggregate, sir.

    Dr. SNYDER. And we are still in fiscal year 2004, so have you averaged them out every day of the fiscal year 2004? Is that how you get at that rate?

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    General MOSELEY. Sir, we do. We track that every day with cumulative returns from the major commands to the headquarters on where we are on any given day.

    Dr. SNYDER. So on page 11 it says that the current fiscal year 2004 tanker fleet rate is at 77.8 percent, but then I look at your snapshot over here and it says the tanker rate is 86 percent on February 15. So you had a good run of two or three months in terms of getting the tankers up and flying.

    General MOSELEY. Actually, sir, we have had a good run for about two years because of the money we have put into the depot and, with the help of the committee, the replenishment spares for those airplanes. But even at the peak of that, we are still below the trend line over a 10-year period, which is trending down on MC rates.

    Dr. SNYDER. I see.

    General MOSELEY. And even with that peak, we are still below the mobility command standard for expected MC rates or in-commission rates.

    Dr. SNYDER. For tankers?

    General MOSELEY. Yes, sir.

    Dr. SNYDER. I wanted to ask Admiral Mullen, in your closing oral statement, you used the phrase ''unforeseen changes'' coming up. The discussion you were having about the budget and supplementals, is that what you were referring to, that one of the unforeseen changes will be the timing of the supplemental and when it will occur, and how much money it will be?
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    Admiral MULLEN. There certainly has been a lot of discussion about a supplemental after the election, in early calendar year 2005. My very specific comment with respect to that was, in order for me to execute it in a meaningful way in 2005, literally having money in hand in the spring is about the time I would need it in order to reasonably execute it for the rest of the year.

    Dr. SNYDER. The spring of 2005?

    Admiral MULLEN. Yes, sir.

    Dr. SNYDER. So you would need it in April of 2005, not just being passed in 2005, but you need to have money in hand.

    Admiral MULLEN. Money in hand. I know, given the calendar, that is a challenge.

    Dr. SNYDER. Difficult, yes.

    Admiral MULLEN. Because I am halfway through the fiscal year, obviously, at that point. What the specifics of it would be, the amount, what it would be for, those are the unknowns at this point with respect to the Navy as far as predicting what we would need it for and how much it would be.

    Dr. SNYDER. Thank you.
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    Thank you, Mr. Chairman.

    General CASEY. Congressman, if I could, the Army is closer to March. We will need it in March for the operations and maintenance.

    Mr. HEFLEY. Ms. Davis.

    Ms. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman, and thank you to all of you. I greatly appreciate your service and I know that all the Members do.

    The heart of a lot of the work that we do across the services deals with depot maintenance. I wonder, is it possible, and I do not want you to have to oversimplify, to characterize or quantify the backlog in depot maintenance now and what you anticipate for 2005?

    General CASEY. I will start off. We have funded our depot maintenance at what we think are about 82 percent of our requirements. What that means is that we have vehicles that are of a sufficient mileage level and are sufficiently worn out that if we had all the money in the world, we would put those in there.

    That said, we believe that between what we have put in the 2005 budget and what we expect to get for the war-related costs in 2005, we will have all of the depots fully work-loaded for 2005.

    Admiral MULLEN. From the ship's standpoint, ma'am, as you know we have loaded our depot. We did it as quickly as we possibly could with our industrial base—as quickly as we could coming out of IRAQI FREEDOM. It has been full. I spoke briefly of that in my opening statement. From a backlog standpoint, there are really two factors. One is, because of the readiness investment over the last several years, it is significantly down from what it was three and four years ago. We have not eliminated it. We estimated on the order of about $150 million right now, which again is a significant reduction.
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    The worry about that is, back to having the right amount of money to do it, is we dug ourselves out of that hole because of your support over the recent years, and that is the place typically we would go if we were not able to otherwise come up with the resources to support the requirement. And when you start digging in those holes, it just becomes a very negative cycle from which it is extremely difficult to recover.

    So we are in pretty good shape right now. We would like to try to stay there, not just to maintain the ships that we have in terms of where we are right now, but also to forego digging ourselves into a hole in the future.

    Ms. DAVIS OF CALIFORNIA. Yes. And maybe just to tag on to that, because in reference to what you mentioned in terms of 2005, of the 80 percent perhaps for the Army, should that be an expenditure that is included within the budget, as opposed to anticipating the supplemental? I know, again, predicting is a difficult thing to do, but is there a ratio that is acceptable in terms of what we anticipate, what you would expect in the budget to keep that at a reasonable level, versus the supplemental?

    General CASEY. If I could on that, as you know, we constantly make decisions about balancing risk between the current and the future; and really the work that we do in the depots is about the future and preserving the equipment for the long haul. We believe that we are at about the right point here, the risks that we are accepting by not putting those vehicles into the system right now. It is acceptable at the current time.

    Admiral MULLEN. I am about 97 percent on ships and about 99 percent on aircraft right now in terms of depot maintenance. So again, I am in pretty good shape. Assuming we continue through this year, we will have the ships ready to go as we did a year ago, very shortly.
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    General MOSELEY. Ma'am, let me only add the Air Force-unique part of that. We are managing an aging fleet. You have heard my chief and secretary over time say that since Orville and Wilbur flew in 1903, we have never operated a fleet this old. So the challenge of maintaining this fleet and balancing that risk with our depots is serious work for us.

    Last year, we had $3.3 billion in the budget for the depots. This year, we have $3.7 billion; and we are funding it at that same risk level. We asked our major commanders to assess that risk and balance that expenditure so we can get fewer number of days in depot, while still maintaining fleet availability.

    So that is the challenge for us. Several issues come to play at once, an aging fleet, the $3.7 billion we have, and the outstanding workforce at our depots who have done heroic work in the surge over the last two years, by the way, to get some of the key enablers down below 300 days in-depot status, to include the tankers and some of the other enabling platforms. So I would echo what my joint brothers have said.

    Ms. DAVIS OF CALIFORNIA. Thank you. Is there a figure that is fair to use in terms of percentages?

    General MOSELEY. Ma'am, we would have to break that down by each aircraft type, because they are all different parts of the tribe with different challenges, whether they are B–52s or KC–135s or Rivet Joints or fighters. Our desire is to get them out of the depot as fast as we possibly can; but with some of the aging platforms, the depot experts are having to manufacture parts, as opposed to just program depot maintenance, which is a bit of a challenge for us.
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    Ms. DAVIS OF CALIFORNIA. I understand. Thank you.

    General Huly.

    General HULY. Ma'am, we have not postponed any depot-level maintenance in the Marine Corps. We have increased our work hours, our overtime hours by 15 percent this last year or during this year. We have just recently added a second shift down at Albany to our depot maintenance. It is a matter for us of striking a delicate balance of what we need to do to keep our depot maintenance going, and then respond to emerging needs for what we have. This year, we have allocated $71 million for this fiscal year for our depot maintenance.

    Ms. DAVIS OF CALIFORNIA. Thank you.

    Thank you, Mr. Chairman. I was going to ask about homeland security and the interface with agencies within communities in which you work, and again if there is I guess a way to quantify the impact that that is having on the services. Perhaps someone else can pick up on that question if they are interested.

    Thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you.

    Mr. Hayes.

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    Mr. HAYES. Has anybody asked about Fort Bragg yet, Mr. Chairman?

    Mr. HEFLEY. General Casey, you have to tell him whether you are going to close Bragg or not. He is in a nervous twitch. [Laughter.]

    Mr. HAYES. I want to make sure that Polk and Bragg are at the top of the list here.

    A question for you, you have done an admirable job of preparing a list of unfunded requirements. I have a minutiae question for the Army. The Marines worry about socks and T-shirts. I am not sure the Army guys have got the best in the business, and I might take a look at that.

    All joking aside, in this list, there is no direct addressing the problem which is historical in nature, that anytime you are underfunded, the first place to go is the Sustainment, Restoration and Modernization (SRM) account in order to equip the soldiers. That problem exists. It is getting worse. How do we address that going forward as we try to fund these unfunded requirements? Anybody?

    General CASEY. I am not quite sure what list of unfunded requirements you are looking at, Congressman.

    Mr. HAYES. Maintenance, leaky roofs, those kinds of things.

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    General CASEY. Okay, installations.

    Mr. HAYES. They do not get fixed when the money is short. That is how you all manage to do your job when we do not do ours. How are we addressing that and the unfunded list?

    General CASEY. In the Army, Congressman, we have funded SRM at 95 percent of the requirements. We are gradually making improvements on the basis, because of the commitment——

    Mr. HAYES. I am giving you the chance to put us on the spot, not you. [Laughter.]

    I am trying to lead you down the right path here.

    General CASEY. Congressman, I understand. We have looked very closely at this and I think you have seen a concerted effort by the Army over the past several years to fully fund the SRM and we are close to doing that this year.

    Mr. HAYES. Okay. Well, we still have some major gaps there and I want you to include that in the unfunded requirements, because the longer it goes unaddressed, the more expensive it becomes when we have to go to the paymaster eventually to deal with that.

    I notice the Marine Corps, General Huly, there are some MILCON requests. Does the Marine Corps participate in the RCI program for family housing that the Army is doing successfully now?
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    General HULY. The RCI program, sir?

    Mr. HAYES. The Residential Community Initiative, where outside contractors come in and provide the majority of the money?

    General HULY. Yes, sir, we do. We call it the public-private venture. I believe that is the same program. Yes, sir, we do and we are attaining a great deal of success. I think the most recent figure I saw is we have some 7,000 units that are currently under contract with public-private ventures.

    Mr. HAYES. Good.

    General HULY. We are finding a great deal of success with that, sir.

    Mr. HAYES. Great.

    General Moseley, if I can find this question, I think I know the answer, but you talk about mission-capable rates are up, cannibalization rates are down, which is good. And on page 13, we still show a downward trend in readiness. What do we need to fix the problem on page 13? I know the airplanes would help.

    General MOSELEY. Sir, with this committee's help and others in Congress, the President's budget does address that with new buys of the FA–22s. We do have in the FYDP $150 million in 2006 and over $4 billion in the FYDP for a new tanker, the KCX. With the Congress's help, we are addressing the tanker problem. We fully support the OSD commitment to recapitalization of that. We fully support this AOA (amphibious objectives area) study. We fully support the pause to look at the lease, so the tanker business is being addressed, I believe, in the right way.
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    We have over the last three weeks discussed the notion of enhancements to long-range strike, which gets us to modernization and the full interoperability with the B–2. With the committee's help, we are looking at bringing seven of the remaining B–1s back to give us a higher attrition reserve, to give us 67 B–1s. We are looking at enhancements to the B–52 and all bombers to get them into the network with Link–16 in the data link.

    The secretary and General Jumper at the Air Force Association addressed the notion of perhaps a bridge aircraft, something like an FB–22 that will get us a manned platform, much more survivable and capable, with low observable characteristics. We have had 24 bomber studies ongoing at once. We have jelled those down into two offices, one at Air Combat Command and one at Air Force Material Command, to look at the long-range requirement out beyond 2025.

    We have looked at the enhancements to our sensor capability. The chief in his testimony has talked about the E–10, which will be potentially a combination of AWACS, Joint Surveillance Target Attach Radar System (JSTARS), Rivet Joint, Compass Call, and what used to be called ABCCC (Airborne Battlefield Command and Control Center).

    So with the committee's help and leadership, we are addressing an aging fleet, which gets us back to the depot question and MC rates and availability rates on a fleet that we have never operated as old as this.

    Mr. HAYES. Thank you, sir.

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    Mr. Chairman, could you indulge me for one more question?

    Mr. HEFLEY. Sure.

    Mr. HAYES. I have saved the easiest one for last. The military has done a great job of accomplishing jointness, seamless integration of forces. Now we have a new department. It is called Homeland Security. If you dare, talk to me about the competition for money for defense versus, in my opinion, money that ought to be on offense, in terms of money we are building walls that anybody can scale, we are taking money that could be put in a war-fighter's hand to track down and eliminate the bad guy. Would anybody like to comment briefly on that?

    General CASEY. I think that is above our level, Congressman.

    Mr. HAYES. Good answer. I just want you to know it is on my mind and we can help work with that. I think that would be better utilization of hard-earned taxpayer funds.

    Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Bishop?

    Mr. BISHOP. Thank you.

    General Moseley, I have two questions I would like to ask, if possible. I, along with a lot of people, was very happy and pleased to see the significant amount of funding in this year's request for depot maintenance. Actually, it is three questions. The first one is, do you prefer ''depot'' or ''depot''?
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    General MOSELEY. Sir, I am from Texas. I guess I could go either way. ''Depot'' just kind of rolls off the tongue easier.

    Mr. BISHOP. Thank you. That is what I have been saying, too. All right. That is the first one. Great. But with depot modernization, especially at the Airlift Command Centers (ALCs), they have assured their capacity to maintain their commitment at least par with, actually exceeding what the private sector can do, and maintain that surge capability intact. The question I have is, the department, or especially the Air Force's level of commitment to that modernization effort in the out-years, are we going to see that same kind of similar boost to modernization next year, or is this a one-time shot?

    General MOSELEY. No, sir. This is a commitment to our depots, all three of them, to ensure that we can continue to produce the right airplane at the right time for our crews.

    Mr. BISHOP. The third question, then, is with increasing pressures coming from some sectors, sometimes almost on a private agenda, how important is it to ensuring readiness, that the Air Force retain a core depot maintenance capability in-house?

    General MOSELEY. Sir, we are committed to that core capability, but I would also add that our partnership with industry has actually helped that core capability. There is, in some cases, a partnership that is transcended beyond just the business case. In middle Georgia, we have also partnered with the vocational schools there to look at backfills for civilians, to look at tradesmen, to look at training people, educating people, so that we can use them in the workforce. So this partnership has been useful for us across a couple of venues.
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    Mr. BISHOP. Mr. Chairman, if I may have indulgence for just one minute. General, I have recognized that as well, and I wanted to commend what you were doing, especially with Air Logistics Centers (ALCs), which I have visited, on the partnership effort. The ability to bring the private sector onto the base brings the best of both worlds together. I think it has been a very positive impact on the turnaround rates, especially the last time I was able to be at Hill, and recognized the team reorganization effort, the Lean program you are going through. It was exciting to see the amount of use time that is being reduced in maintenance, repairs and turnaround.

    I told General McMahon at the time, he could have ordered his employees to be happy and excited, but unless they were the greatest thespians in the world, they could not have masked the real energy that they are bringing into their jobs. It is a great workforce. I think your Lean concept has revitalized them. I am very positive about what you are doing in the depot system here, and I thank you for that, general.

    General MOSELEY. Thank you, sir.

    Mr. BISHOP. I am done, Mr. Chairman.

    Mr. HEFLEY. Mr. Larsen?

    Mr. LARSEN. Thank you, Mr. Chairman. I apologize for being late, but I understand a few of the questions I have have not been asked, and they are mainly directed toward Admiral Mullen regarding the Fleet Response Plan and how the O&M budgets fit into that. The FRP shortens O&M time for carriers, from my understanding of this. I was wondering how the O&M budgets in the 2005 request fit with the FRP, what kind of changes you have made to accommodate the new maintenance cycles.
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    Admiral MULLEN. The Fleet Response Plan is designed to be budget neutral. So clearly our goal is to build readiness over a much broader part of our force within the resources that we have available. There are really two aspects of that. One is, and you specifically talked about O&M cycles being shortened, there are several initiatives to try to make sure we do the right maintenance at the right time. There will be times, our history is when you bring a ship back from deployment, we have a tendency to tear it apart and build it all back up. Yet the ship was running probably as well as it ever has been the day before you get back. So we want to do the kind of maintenance we need to do when we need to do it, which will require light maintenance on occasion and deep maintenance on occasion. We recognize that.

    Taking all of that into consideration, we want to maintain a higher level of readiness across the full spectrum, including when ships return, they immediately become part of the surge force, if you will, and then build readiness at various levels throughout the cycle as they get ready to deploy on what is a nominal or notional regular deployment cycle. That is the concept piece of this.

    We have also taken significant initiatives in trying to mitigate the risk with the resources we are provided to figure out a better way to do business, in terms of how we are going to expend those dollars. So we have asked those in the Navy who are executing those dollars to assess risk, and talk to certainly those of us in the leadership positions, and figure out in many ways a better, more effective and efficient way to do it.

    So it is a resource that we are trying to quite frankly cap readiness growth, build the readiness in this new concept, and be able to provide what is nominally about a 50 percent more capable force on any given day in terms of its readiness.
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    Mr. LARSEN. Are you confident? You have just started implementing the FRP. Are you confident you can stay budget-neutral, or are you just going to shoehorn budget neutrality, make it budget neutral?

    Admiral MULLEN. I am probably somewhere in between. We have worked this very hard in terms of its initial implementation. This is the first year of it, so certainly there are some unknowns that we are going to come across. But we are very committed to it. We are not just trying to make it happen on demand. We have really tried to look at exactly what it is going to take to make it happen. As an example, two of the ships that just surged to take the Marines over, the BOXER and the BATAAN, very recently had returned; and they have had a number of deployments in recent years. That is an example of the kind of readiness that we are trying to sustain over a much longer period of time.

    At the same time, we are not trying to classically just put wedges, what we call in comptroller-speak into it, and say go figure it out. So there is a lot of interaction to try to make sure we understand it and make it work. We have a great deal of confidence that we will be able to proceed this way.

    Mr. LARSEN. I think you are on the right track. At least you have convinced me, the Navy has convinced me, of why a Fleet Response Plan is necessary in today's environment. I just want to do my job to ask these questions to be sure they are getting asked. I certainly look forward to hearing back next year, if not sooner than that, on the progress of the implementation and on whether or not you can stay underneath that cap.

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    Admiral MULLEN. Yes, sir.

    Mr. LARSEN. So I do look forward to hearing back from you on that and to see what we can do to help out. Thanks.

    Thank you, Mr. Chairman.

    Mr. HEFLEY. The services have testified over the years that aging platforms cost more to maintain, and yet there seems to be some evidence that suggests that the newer platforms actually are costing more to maintain than the legacy systems because of their level of sophistication. Would you all speak to that? How accurate is that?

    General MOSELEY. Sir, I think perhaps I could address that first for you. A good example is our low-observable or our Stealth fleet. The F–117 was the first of those that we fielded, and we fielded that with emerging technologies in the late 1970's and the early 1980's. We find that it is increasingly more difficult to keep that airplane completely in commission because of its skin and because of the low-observable treatment.

    The B–2 is a much later low-observable platform. In fact, the skin of it is much easier to maintain than the F–117. As we look at the F–22, we see the low-observable applications of it are much easier. So even though the F–117 is a newer platform than some of the other aging systems, it does cost more and it does take more time because of the particular treatment of the airplane and its characteristics.

    The F–22, one of the performance prerequisites for it is that it would be easier to maintain in the field than any of the other previous low-observable platforms. It is proving to be that. There are still challenges with that, but it is proving to be much easier to deal with than the B–2 or the F–117.
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    So there is a point in time for you. Those airplanes are more difficult to maintain than an F–15 or an F–16, only because of the technology applications and what they provide.

    Mr. HEFLEY. Does anyone else want to comment?

    Admiral MULLEN. I can comment quickly, sir. Up to about 18 months ago on the aviation side, F–14 Tomcats were the most expensive airplane that we had. About that time, that got exceeded by our EA–6B Prowlers. Those were the two that are routinely much more expensive to operate, which is why we have put them on an exit strategy; and clearly the planes that we are bringing in are going to be more sophisticated and more capable. But the F–18E and F–18F, which are our newest, have not been anywhere near what is going on with those other two jets, for example.

    General CASEY. I would just comment that our experience is that the older systems do cost more to maintain. I will tell you that we have the Stryker system over in Iraq, and we are doing some analysis on the cost of maintaining that system. So when we get that, I will come back to you and let you know how that works out. That would be a good example of checking out a new system to see if it costs more or less to maintain.

    Mr. HEFLEY. All right.

    General HULY. Sir, for the Marine Corps, while it is not here yet, we are looking forward to the Joint Strike Fighter's ultimate arrival. We believe that that aircraft will require far less maintenance, less maintenance personnel, and will require less time to turn around and will give us more punch. So we believe that that system will actually be a benefit to us, as compared to the AV–8 that it will replace.
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    Mr. HEFLEY. General Casey, of the 117,000 troops currently in Iraq, approximately 57,000 of them are Guard and Reserves. That is roughly half. Would you speak to that? Is that getting the ratio out of balance? Do we need to re-balance the active and Reserve?

    General CASEY. I do not think so, Congressman. It is going to actually drop a little bit as we complete this rotation. I think what you are seeing is we are using the Reserves, particularly in the combat support and combat service, what is really across the board. I did mention earlier in my statement that we had about 100,000 spaces that we were shifting back and forth, some from the Reserves to the active, some within the components. We think that is going to get us a much better balance of forces for the future.

    So we will not keep calling on, for example, civil affairs units that are primarily in the Reserves, military police that are primarily in the Reserves. Some of those critical specialties that we are leaning very hard on now, we are going to have more of those units in the Army so we will going back to them less and less.

    I would say we could not have done this without them. They are very, very well prepared and well trained. I think you going to see, particularly in these three enhanced separate brigades that are just now moving into Iraq, they are equipped with the best equipment we have. They have been through a very rigorous training program. They are very confident in their abilities. So we are very happy about that.

    Mr. HEFLEY. Thank you.
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    General, would you speak to the overall readiness trends of your units, particularly the units within the first Marine Expidetionary Force (MEF) who are redeploying to Iraq?

    General HULY. Yes, sir. The readiness trends, I believe you are probably referring to maintenance readiness trends first, the units that came back from Iraq in August timeframe, or between May and August, came back. They were mainly equipped with the maritime pre-positioned force from Maritime Pre-positioning Ship (MPS) Squadron One. Their equipment was used. Their equipment was backloaded when the units withdrew. It was taken to Blount Island and it is currently being reconstituted now. They left a majority of their normal equipment. It remained behind equipment back at Camp Pendleton, which was for the most part their home station, except for the Reserve units that participated. Many of those same units are now returning to OIF, Operation IRAQI FREEDOM II. They are falling in on maritime pre-positioned squadron equipment, the set that was mainly unused or it was backloaded from OIF I equipment that was in good shape. So their equipment readiness is up around the 88 to 92 percentile of the equipment that they have. So our equipment readiness is in pretty good shape, sir.

    The other units that we still have remaining in the continental United States, their equipment readiness runs anywhere from 88 percent, 89 percent, up to 94 percentile. Equipment readiness is very good, sir.

    Mr. HEFLEY. Thank you very much.

    Dr. Snyder, I think you have another question or two?
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    Dr. SNYDER. Thank you, Mr. Chairman.

    Admiral Mullen, to continue the discussion about this supplemental business, help me clarify this. One of the issues that has come up is this tension between why can't things be budgeted in the normal authorization and appropriation process, versus supplemental. There are good arguments on both sides.

    One of the arguments in favor of the supplemental is that it is difficult to predict. I think somebody made that point today, particularly Iraq and Afghanistan. But when I hear you say that you need cash in hand by April; and General Casey chimes in he needs cash in hand by March, that tells me that you are very reliably calculating your financial needs and that if we were to do this through the normal process, we would not have you run out of cash in March, General Casey, and you, Admiral Mullen, in April.

    So you are saying that you are able to estimate fairly reliably, down to the exact month when you are going to need additional funds. Is that a fair interpretation of what you said?

    Admiral MULLEN. No, sir. I appreciate your follow-up on this. For me, what I am saying is if I need a supplemental, and I don't know that I will; but if I need one, if I am going to reasonably execute it in the fiscal year next year, I need to have the money in hand by mid-year. It becomes an execution problem.

    I will let General Casey speak. I am really talking about, it is unpredictable. I do not know. Right now I see the $700 million shortfall. I am working inside the resources that have been made available by you in the 2004 supplemental right now, with OSD, to see if I can resolve that. So that is the extent of my problem known right now, because of this unexpected cost move in the Marines.
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    I think General Casey is talking about known supplementals he will require, and I think what he is saying is that he expects, in order to continue the year, to run out of money in March and would have to have it by that time.

    General CASEY. That is based on some rough calculations. We certainly do not have the level of detail that you require here to ask for a supplemental. We do not know that, and it is really not knowable for us right now. Ours are primarily based on the number of troops that are going to be required, and that number could change substantially probably in a lower direction between now and the time we get over there.

    Dr. SNYDER. I understand.

    General Huly, I wanted to ask you a couple of questions. You all have been doing things differently than the Army, somewhat, it is my understanding. How long are your rotations in Iraq going to be?

    General HULY. Sir, the Marine Corps has had in place now for probably in excess of 20 years what we call the unit deployment program in the Marine expeditionary units that would deploy for six to seven months at a time. We have set up our recruiting, our recruit training, our follow-on schools and our assignment to infantry battalions is a good unit to use as an example, based upon a six-to seven-month deployment.

    It works out so that a young person that is in her first enlistment, probably for four years, in that amount of time with the normal deployment ratio that we would like to see, would receive their initial training, about six months in length, join a unit, have some time to work up and prepare for deployment, go on a six- to seven-month deployment, return, have about a year at home, go on another deployment, come back and exit the service in a reasonable operational tempo that would prepare them for whatever else that they were going to do, either reenlist or go on and become a civilian Marine again.
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    Dr. SNYDER. One of the issues, of course, is the continuity. That is a fairly rapid turnover.

    General HULY. Yes, sir. But the only units that we are rotating at the six-to seven-month mark out of Iraq and Afghanistan are going to be the infantry battalions and probably some of the squadrons and some of the combat service support. The higher headquarters, the regimental division Marine expeditionary force headquarters, are remaining for 12 to 14 months. We believe that they will provide the continuity and the linchpin, so to speak, for the new units as they come in.

    Dr. SNYDER. I want to ask one question that is somewhat unrelated to what you all are here about today, but I guess I am going to keep asking this until I get somebody to give me the answer I want, whatever the answer is. There was a report on NBC News last week about Iraq, talking about al Zaqawi and Ansar al-Islam. The basic report, and I do not know if it is accurate or not, was that there were three times when we had actual intelligence, in June of 2002 and four months later, and then in early 2003, that he probably was at the camp up in the Kurdish control area in Northeast Iraq; and the Pentagon drew up a plan to take out the camp and potentially him, but the National Security Council rejected it. According to NBC News, their sources, they say the reason it was rejected is because they thought it would interfere with building support for the potential coalition members for the war in Iraq. Do any of you have any information that could say whether that story was accurate or inaccurate or not?

    General CASEY. No, sir.

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    Admiral MULLEN. No, sir.

    General MOSELEY. No, sir.

    General HULY. No, sir.

    Dr. SNYDER. Thank you, Mr. Chairman.

    Mr. HEFLEY. Any further questions? Yes, Mr. Hayes.

    Mr. HAYES. I wanted to come back to General Casey for just a minute. I apologize for maybe asking the question incorrectly at the beginning. I will use Fort Carson as an example. My understanding of the process is that there are two basic accounts. Money comes down to operate that fort, streets, sewer, and water. Those funds have not come down at the 95 percent level. I think they come down at 70 percent when you are lucky, and then unfortunately that lesser amount has more taken from it again to make up the difference from what we as Congress should be providing to you. Does that make the question more clear and give you a better opportunity to address us on our shortcomings?

    General CASEY. You are right on the mark, Congressman. We have resourced-based operations support right at the 70 percent level this year. As you know, what usually happens, what has happened recently, is there is migration from the SRM account into the base operating accounts to keep the lights on and the water flowing on the post.

    As you know, this is something that we have wrestled with in the operations and maintenance account for years. It used to migrate from training funds into base support funds. But as we look at everything that we are doing, as we look at the state of our installations, we believe that the way we are funded this year will allow us to do what we need to do and maintain an appropriate quality of life for our folks.
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    Mr. HAYES. Okay. Just a last comment, and thank you, Mr. Chairman. If that is the case, and I hope to some degree it is, then on the unfunded requirements, there ought to be a substantial amount of money to make up the shorts for neglect of a number of years. I want to make sure that gets in there. Thank you very much. Thank you for what you and your men and women do, particularly.

    Mr. HEFLEY. Do any of you have anything else you would like for us to know before we close the hearing?

    Mr. ORTIZ. Mr. Chairman, if I may?

    Mr. HEFLEY. Yes.

    Mr. ORTIZ. I would like to include some questions for the record. One of the things you mentioned about converting military positions to civilian jobs, and how are you going to do that. I know that there are other commitments in the next few minutes, and if I may I would like to submit several questions for the record, Mr. Chairman.

    Mr. HEFLEY. Without objection.

    Thank you very much, gentlemen. With that, the committee stands adjourned.

    [Whereupon, at 10:37 a.m., the subcommittee was adjourned.]